• by Laurie Sullivan , 6 hours ago

In a race to grab market share, Perplexity announced that it will pay Snap $400 million over a period of one year to integrate its AI answer engine into Snapchat.

Exact terms of the Snap-Perplexity data-use agreement were not publicly detailed, but Perplexity is facing a lawsuit from Reddit for allegedly scraping data from its platform for AI training without permission.

The move gives Perplexity access to Snapchat's reported 943 million monthly users. More than 75% of 13– to-34-year-olds in over 25 countries use Snapchat.

The integration, which will take effect in early 2026, includes cash and equity payments over one year.

Snap said the deal is its first large-scale integration of an external AI partner directly in the app.

“The partnership underscores Snap’s growing role as a trusted platform for AI partners to reach a large, engaged, mobile-native audience,” the company explained in a press release.

The integration will sit alongside Snapchat’s existing My AI chatbot, which remains available as a separate assistant.

On Wednesday the company reported third-quarter revenue of $1.51 billion, up 10% compared with the same period last year. 

Perplexity processes more than 150 million questions weekly, but Snap’s age-verification process could put up a roadblock for meaningful growth.

BMO Capital analysts expect the experience on Snapchat to improve, while also gaining “high-margin partnership revenue for Snap.”

Snap has age restrictions, and requires those who create an account to be 13 years of age or older. BMO analysts believe the age-verification process could present risks for engagement and growth in 2026.

There is a plan to more effectively use new signals from Apple and Google to identify the age of users on the platform.

BMO analysts “question the size of the Under 13 user base and the potential headwind that age verification could pose to growth.” While stating the person’s age via birthday is required, Snap does not verify it.

In a research note, BMO analysts wrote that Snap management may already have a sense of the impact, when they said age verification is "likely to have negative impacts on user engagement metrics that we cannot currently predict.”

It’s also unclear whether Perplexity will need to make changes to its infrastructure to handle the additional use of its engine, and whether the deal will lead to an agreement for social commerce. An increase in users means higher latency.